The method by which decisions are made is, of course, timing. This provides plausible deniability to all parties.
A previous post, "The Inflation Scam" had two Google +1's... the only interaction I have noticed on this blog. It is possible there are more and Blogger just discriminates against non-Google social networking sites in its listing of posts though, and it is also possible that people shared posts on OWS (the sharing options were off the screen with my browser window size). But then it went down to a single Google +1.
As mentioned in a previous post, most people think they're above average. This means when the system is broken, they are predisposed to thinking that they have the ability to take advantage of and profit within the current system compared to people who are not aware that the system is broken.
It is, in other words, to the advantage of the smartest people in an untrusted environment to avoid revealing their capabilities. One example of this can be seen in the short story "The Change", set in the Star Trek universe.
Apparently this site has some information on financial "quants" although I haven't read any of the posts on the first page of search results, only the ones linked from a comment on FT Alphaville » When scientists become hedge fund managers. The general idea is that many mathematicians and physicists end up going into the financial sector. Maybe this is why unemployment for those college majors are relatively low? I am not sure if statistics about well-paying college majors care whether someone ends up with a job in the field they studied for. There is a book on the topic, the general idea seems to be that the "quants" did well in normal times but were unprepared for the large-scale events of the financial crisis and some of them lost money. In contrast, some other financial entities profited from the crisis including apparently Goldman Sachs.
Which is to say, while most companies were net "long" for the crisis, some of them were better at preparing for the crash or whatever else happened and were therefore better positioned to buy up assets at low prices.
The point is just that given two equally smart people, one of whom spends 12 hours per day studying financial markets and the other spending 10 minutes per day, the second will likely end up losing their money to the first, or to someone else who is even more intelligent. A quick example:
Person 1 is sure that a certain asset will be higher in price one year from now than it is today, due to inflation driving up the cost of everything. They buy 100 units of the asset from someone who is willing to sell, for a total of $500. Let's say it was a bank that was selling, named "The Bank", that now has an extra $500.
Person 2 is an expert trader, who invests their money where it will give the highest returns. They anticipate that the asset will drop in price by 20%, and so "short" the market by borrowing units for a small fee and selling to someone who is willing to buy at the current price, then returning the units once the price has dropped. The market 'width' allows them to do this with 100 units, so they have instantly made $100 as the price for 100 units drops to $400. (Another FT Alphaville post, "The power of the dark inventory" gives an example of this kind of price manipulation in practice.)
But let's say that usually they don't have the opportunity to short. Several months later, Person 2 anticipates the price will rise back to $5 per unit from $4. So using just $50 of their own money, they borrow $350 from "The Bank" (which has money because it previously sold units to Person 1) and buy 100 units.
If the price dropped below $3.50 per unit, Person 2 would have to provide more cash to the bank or allow the bank to immediately sell the units to prevent further losses, but prices rise as predicted. Person 2 makes another $100 profit and returns the $350 to the bank after selling the shares at $500.
Another several months go by. Unit cost has dropped to $4.50, Person 2 repeats the same deal, etc... after a total of 11 months have gone by, unit cost is at $8 and Person 2 has made $500 profit using just $50 of their own money. They spent the $500 profit on pizza or reinvested it in other, similar but slightly less profitable deals.
But just before Person 1 is prepared to sell, prices drop down to $5 because of a glut in the market! Person 1 has made no money. "The Bank" made a small profit each time that Person 2 borrowed money to buy up units using 'leverage', as did anyone who lent units for "shorting". Person 2, of course, profited greatly. Everyone who bought high, because they expected prices to keep going up, and then sold low, because they expected prices to drop even further, has lost out. At month 11, Person 1 thought they had made an easy $300 because the value of their investment had increased from $500 to $800 despite many changes on the way, but prices dropped and it turned out they were wrong.
This paper from the Economic Policy Institute (mentioned before) has an interesting chart on page 27 comparing home ownership in the United States to housing prices, which is basically like the above narrative. Around 1995 home ownership rates began to increase. Housing prices gradually began rising and then accelerating in the price increase as the idea that "house prices are rising" became more popular, leading to greater acceptance of high prices. Home ownership peaked around 2005, house prices peaked about a year later, and as soon as it was apparent that those without houses were either unable or unwilling to buy into the market, prices collapsed leaving people who had bought at the peak of housing prices heavily in debt.
I suppose it helps to mention Table 9 from the same paper, page 17. Stocks don't make up the only type of investment, but for example 58% of households with income $50~75k held stocks either directly (19%) or in pension plans (50%).
The point is that while the recent financial crisis mostly led to only a temporary drop in stock prices, the accelerated work week would basically lead to a permanent drop in stock prices and wealth loss even for households that are not using leverage in their financial investments.
Charts are nice: US Debt Limit and Debt Versus Gold in US Dollars
As you can see, the price of gold has been rising nicely with the US debt limit. Of course, people noticed this and so gold had a sort of bubble. If not for this volatility, people would just borrow more and more money to buy gold because the fundamental reason for its price increase, the increase of US debt which effectively determines the amount of money people have to play with since government bonds are basically the equivalent of cash, is very predictable so people can anticipate the general prices that gold will go for in the future. If people anticipate prices will not continue a predictable rise, they will pull out causing an immediate drop in prices. And if the US fixes its budget deficit and ends inflation, there will be an expectation that prices will no longer rise.
Not a good argument? Then look at it this way: it is commonly repeated that people are buying inflation-adjusted US bonds at negative real interest rates, and the effective rates for non-inflation-adjusted bonds are at record lows. This means that "a very low rate" is still higher than what they could get from buying stocks and getting dividends. Other people should not expect a different result.
...this situation is so stupid. "Society is mean and uncaring, so I'll secretly do something which hurts society (higher unemployment) but helps me by earning and saving money"... or even earning and spending money. People are so concerned with concealing knowledge of the first part that they take what they should do in the second part for granted. Meanwhile everyone pretends that working harder is the "right thing" despite that there is no logical connection between working harder and reducing unemployment; people simply never question why there would be one.
I might as well point out that with the Manifesto for Economic Sense, what is significant is those who have not signed it.
As pointed out in the notes for a previous argument, if you can't negotiate for a reduction in work hours with a higher rate of pay, you are a bad employee who is not valued at your company. If people are to be trusted when they say that reducing unemployment, upholding moral values etc. are important, then using, supporting, and encouraging the use of the accelerated work week is a sort of moral imperative as long as these problems are seen to exist. If enough people use it that unemployment basically goes away, then people will be able to work more without harming society. In the current situation, working very long hours is not justified for any economic task which people are willing to pay for.
Most people do not say that the price levels in financial markets or any similar thing is an important issue in the US or a factor in their voting decisions. While people with exposure to the financial markets should be warned of the consequences of a widespread adoption of the accelerated work week, this risk should not be a factor in decision making.
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